Greece is one step away from being unable to borrow on international markets, the country's Prime Minister George Papandreou has warned.
"We have been forced into the toughest decisions ever taken by a government in this country," media reports quote Papandreou as saying at a conference in Thessaloniki.
"I am speaking with all honesty before the Greek people that we are one step from being unable to borrow."
Greece needs to service a large chunk of its debt in the next few months or risk defaulting, which would come as a huge blow to the credibility of the european monetary union.
Papandreou said Greece cannot afford to continue borrowing at high interest rates and must avoid doing so to save the economy from a deep recession.
His comments come as Greece's eurozone partners ponder over how best to help the debt-stricken country.
Greece has not asked for financial aid thus far, but has already signaled that it may seek support from the International Monetary Fund if no help is forthcoming from its euro partners.
Greece's deficit is over four times than E.U. rules allow, and its debt estimated at about EUR 300 billion.
Its fiscal plan aims to reduce the budget deficit, estimated at 12.7% of gross domestic product, to less than 3% by 2012, but analysts remain sceptical.
The government has unveiled a number of austerity measures in a bid to cut its deficit, including civil service wage cuts, a public sector hiring freeze, higher taxes and a raise in petrol prices.
The measures have proved highly unpopular among the populace, and has provoked a number of protests across the country.
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